Panorama Consulting recently released its 2014 report entitled “Clash of the Titans” (available here)
in which they explore the various advantages/disadvantages customers encounter during implementation of three well known ERP offerings: SAP, Oracle and Microsoft Dynamics. They do this periodically, and of course each product scores its various highs and lows against the other (although it is worth noting that the first two tend to be very high-end, expense, complex “Tier 1” solutions, whereas Dynamics, mostly, is suited for the small to midsize (SMB) market).
But one trend we saw in their report spoke volumes about the truth about ERP.
About midway through their report, the report’s authors looked at “Reasons Behind Extended Durations.” This was led by a chart (at top here) listing 9 reasons, of which seven had gotten worse over the last three years (2011-2013), most significantly worse.
The main reasons noted in the report for ERP implementations extending well beyond their expected durations were:
- The initial project scope was extended
- Organizational issues
- Data issues
- Unrealistic timelines
In fact, the report singles our “unrealistic [project] timelines” as being the single greatest point of increase over three years. Panorama went on to say:
Organizations want to get their ERP system “plugged in” as soon as possible and don’t understand all of the components that are required to make an ERP project successful – organizational change management, data cleansing, optimization and standardization of processes, training, etc. Due to this lack of understanding, companies set unrealistic timelines for their ERP implementation and the result is that their projects run over-schedule.
Experience bears out the importance of the lesson here. Despite software publishers who wish it were not so, the truth is, ERP implementations are hard, time-consuming, and fraught with ‘gotchas’ large and small (the large ones however are definitely avoidable with proper planning).
Companies like Oracle, SAP, Microsoft, and many others make their money selling software – the more and the faster, the better. Clients and consultants need to constantly remind themselves of what is in the client’s best interests, not the publisher’s. The answer, of course, is a quality and well-planned ERP implementation that comes out reasonably on-time and on-budget.
That starts with a realistic timeframe and budget, based on a well-executed process analysis from the start.
Eventually, doing so will help turn around Panorama’s trend of missed expectations when it comes to extended durations. It can’t come too soon.